Cost per GJ of Heat: Comparing Fuels and Electricity

A Japanese energy report or supplier proposal often lists fuel oil in yen per liter, LPG in yen per kilogram, city gas in yen per cubic meter, and electricity in yen per kWh. Those numbers cannot be compared directly. A low price per liter tells you nothing about how much heat actually reaches your water, steam, or product.

The fix is to convert every option to a cost per unit of useful heat, in yen (or dollars) per MJ, GJ, MMBtu, or kWh of heat. This guide shows the formula, the unit conversions, and why the higher vs. lower heating value basis matters so much with Japanese data. It ends with a worked hot-water example and a checklist you can reuse.

All prices in this article are fictional examples chosen to make the math easy to follow. They are not current market prices. For a real comparison, use your contract or quoted rates.

Contents

1. What Cost per Unit of Heat Means
2. The Formula for Cost per Unit of Useful Heat
3. Converting Between MJ, GJ, MMBtu, kWh, and Therms
4. HHV vs. LHV: Why the Basis Matters with Japanese Data
5. Worked Example: Fuel Oil A vs. LPG vs. Electricity
6. Using the Unit Cost to Calculate Water Heating Costs
7. Turning Energy Savings into Cost Savings
8. What to Include When You Report a Comparison
9. Checklist: Before You Compare Fuel and Electricity Costs
10. Where This Method Falls Short
11. FAQ
12. Sources

What Cost per Unit of Heat Means

In Japanese documents, this figure is called netsuryo tanka (熱量単価, "heat unit cost"). It can mean two different things: the cost of the energy contained in the fuel you buy, or the cost of the useful heat the equipment actually delivers. For comparing operating costs, the second one is the number you want, because it rates the fuel and the equipment together.

Say a boiler takes in 100 units of fuel heat and delivers 90 units to the hot water. Its efficiency, measured to the hot water, is 90%. One MJ delivered to the water therefore costs more than one MJ of purchased fuel, because you also pay for the heat lost up the stack and from the boiler casing.

Figure 1 shows where that boundary sits in a simple hot-water boiler.

A hypothetical example with 90% efficiency, measured from fuel to hot water. If you extend the boundary to the end of the piping, include the losses along the way.

Conceptual heat balance only. It does not show actual piping layout or a breakdown of losses.

Move the end point and the unit cost changes, even for the same equipment. A calculation that stops at the water heater outlet ignores piping heat loss and the cold water you run off before hot water reaches a faucet far down the line. Write down the boundary in words before you start, and the numbers stay consistent.

Plant fuel costs work the same way. Separate the cost of making steam in a boiler from the cost of delivering that heat through steam lines to process equipment.

When you compare equipment options, compare them at the same supply temperature and the same delivered heat.

The Formula for Cost per Unit of Useful Heat

You need three inputs: the purchase price of the fuel or electricity, the energy content per unit purchased, and the equipment efficiency. When you collect these from different documents, record the unit and the basis with each number. Updating the price but mixing efficiency bases will throw the comparison off.

With fuel price P, heating value H, and efficiency η, the cost of useful heat C is shown below. The denominator Hη is the useful heat you get from one unit of fuel. Enter η as a decimal (0.90), not as a percentage (90).

Fuel Price: Read the Denominator First

In Japan, liquid fuels are usually quoted in JPY/L, fuels bought by weight in JPY/kg, and city gas (toshi gasu, piped gas from a gas utility) in JPY/m³. LPG can go either way: some deals are by cylinder weight, others by metered volume. Before you plug in a price, check what unit it is per.

If the price is per m³ but the heating value is per kg, the units do not cancel and the result is meaningless. Converting between volume and mass requires density plus the temperature and pressure conditions. For gas in particular, make sure the billed volume and the heating value use the same volume basis before you calculate.

Japanese city gas supply terms specify a standard heating value, usually on a gross (higher heating value) basis. Tokyo Gas, for example, lowered the standard value of its 13A gas from 46.04655 to 45 MJ/m³ in February 2006, and its customer FAQ still lists 13A at 45 MJ/m³. Confirm the basis and the reference conditions in your own contract or bill before using the number.

Electricity: 1 kWh = 3.6 MJ

Electricity is billed per kWh. A kW is a rate (energy per unit time), and a kWh is an amount of energy used.

Keeping the two separate prevents mixing up equipment output with consumption.

Which electricity price you use depends on the question. To value a small cut in run time, use the energy charge that changes with consumption. To compare a full equipment replacement, also calculate changes in the basic charge and contracted power separately.

Keep the average price (total bill divided by kWh) apart from the price of each extra kWh.

Also align tax-inclusive vs. tax-exclusive prices, fuel cost adjustments, and delivery charges. Recording the month or quote date in your comparison table lets you separate price increases from changes in equipment efficiency. For long-term plans, run the calculation at several prices instead of locking in one.

Converting Between MJ, GJ, MMBtu, kWh, and Therms

Japanese sources work in MJ and kJ, while US gas prices are quoted per MMBtu or therm and many international reports use GJ. Once you have a cost per MJ of useful heat, the table below converts it to any of these units.

Unit	Equivalent	To convert a cost per MJ
1 GJ	1,000 MJ = 277.8 kWh = 0.9478 MMBtu	Cost per GJ = cost per MJ × 1,000
1 MMBtu (1 million Btu)	1.055056 GJ = 1,055.056 MJ = 293.07 kWh	Cost per MMBtu = cost per GJ × 1.055056
1 kWh	3.6 MJ = 3,412.14 Btu	Cost per kWh of heat = cost per MJ × 3.6
1 therm (US)	100,000 Btu ≈ 105.5 MJ	Cost per therm = cost per MMBtu ÷ 10

A simple sanity check keeps you from inverting a conversion. The bigger the energy unit in the denominator, the more one unit costs. So the cost per GJ is always 1,000 times the cost per MJ, and the cost per MMBtu is about 5.5% higher than the cost per GJ.

HHV vs. LHV: Why the Basis Matters with Japanese Data

The heating value is the energy released when a given amount of fuel burns. It depends on fuel type and composition. A cheap fuel with a low heating value means buying more of it, so always look at price and heating value together.

The higher heating value (HHV, gross calorific value) includes the latent heat released when water vapor from combustion condenses back to water. The lower heating value (LHV, net calorific value) leaves that heat out.

In Japanese, these are koi hatsunetsuryo (高位発熱量) and teii hatsunetsuryo (低位発熱量).

Figure 2 shows where that latent heat comes from.

HHV and LHV are not different fuels. They count a different range of heat. The efficiency denominator must use the same range.

How much latent heat is actually recovered depends on the equipment's heat balance. Never multiply an HHV by an LHV-basis efficiency.

Which Basis Japanese Numbers Use

Japan, like the US and Canada, uses gross calorific values (HHV) in its official energy statistics. The EU and the IEA energy balances use net values (LHV). Japan's government emission-factor tables, which many companies use for fuel heating values, are also on an HHV basis.

Equipment data is less consistent. European boiler literature typically quotes efficiency on an LHV basis, which is why condensing boilers can show more than 100%.

Japanese catalogs may use either basis, so read the footnote.

The gap between the two bases is significant. As rough figures used in IPCC guidance, HHV is about 5% higher than LHV for coal and oil and about 10% higher for natural gas. For a contract comparison, use the fuel-specific values from your supplier instead of a generic ratio.

The Heating Values Used in This Article

The worked example uses 38.90 MJ/L for fuel oil A (A-juyu, A重油, a light fuel oil common in Japanese boilers) and 50.06 MJ/kg for LPG. Both are HHV-basis figures from an earlier revision table published by Japan's Ministry of the Environment. In that table, LPG was revised from 50.06 to 50.08 MJ/kg, so 50.06 is the older value.

Here these values serve only as easy-to-follow assumptions, not as current standard values. In practice, align the document date, fuel composition, and mass or volume unit of whatever your supplier provides.

LPG is a mix of propane, butane, and other gases, so its value will not automatically match pure propane. Also keep regulatory reporting factors separate from measured values for the fuel you buy.

Equipment Efficiency

Efficiency is the share of input energy that ends up as the heat you want. If 100 units of fuel heat (HHV) deliver 90 to the hot water, the HHV-basis efficiency is 0.90. Treat the heating value and efficiency as a matched pair, and the useful-heat calculation stays consistent.

Switch the denominator to LHV and the same equipment shows a higher efficiency. The equipment has not improved. The input heat you compare against has simply become smaller.

Rated efficiency applies to specific test conditions. Annual cost also depends on part-load operation, start-stop cycles, heat loss from storage tanks and piping, and auxiliary power.

Measuring fuel use and delivered heat over the same period shows how much of the heat the whole system actually uses.

Do not count losses twice. If you already use an overall efficiency measured at the faucet, subtracting storage and piping losses again counts the same losses twice.

Sketching inputs, outputs, and losses as a heat balance makes this easier to see.

"Efficiency" also means different things for different equipment. Turbine internal and mechanical efficiencies, for example, describe enthalpy drop and shaft output. Do not reuse such a figure as a water heater's fuel-to-hot-water efficiency; check what the numerator and denominator are.

Worked Example: Fuel Oil A vs. LPG vs. Electricity

The following figures are assumptions for learning the method, not current fuel prices or real equipment performance. Assume fuel oil A at JPY 76/L, LPG at JPY 334/kg, and electricity at JPY 20/kWh. Both the combustion equipment and the electric heating system have an efficiency of 0.90 to useful heat, with the combustion figure on an HHV basis.

Each calculation first gives a cost per kJ, then converts it to JPY/MJ for easier comparison. Since 1 MJ = 1,000 kJ, multiply the JPY/kJ value by 1,000.

Fuel Oil A

With an HHV of 38,900 kJ/L and an HHV-basis efficiency of 0.90, each liter delivers 35,010 kJ of useful heat. That heat costs JPY 76, so dividing the cost by the useful heat gives the following.

Lower efficiency raises the fuel cost of the same useful heat. Under these assumptions, an efficiency of 0.80 gives about JPY 2.44/MJ. Even at a constant fuel price, fouling or poor operating conditions show up directly in the cost per unit of heat.

LPG (Propane)

For LPG, use an HHV of 50,060 kJ/kg with the price of JPY 334/kg. At 0.90 efficiency, each kilogram delivers 45,054 kJ of useful heat. The kg in JPY/kg and kJ/kg cancels, leaving JPY/kJ.

If LPG is billed per m³, as on many Japanese household bills, do not substitute the JPY 334/kg figure. Use the contracted volume rate with a heating value on the same volume basis. Separating the monthly total, including the basic charge, from the cost of heating one more batch of water also makes household estimates more useful.

Electricity

Convert 1 kWh to 3,600 kJ. The 0.90 efficiency here is an example electric heating system in which 90% of the purchased electricity ends up as useful heat in the water.

Figure 3 puts the three results side by side, converted to the units in the conversion table above.

Results for the fictional prices and efficiencies below. This is not a market price table or a ranking of equipment.

Heat source	Assumed price	Energy × efficiency	JPY/MJ	JPY/GJ	JPY/MMBtu	JPY per kWh of heat
Fuel oil A	JPY 76/L	38.90 MJ/L × 0.90 (HHV)	2.17	2,171	2,290	7.81
LPG	JPY 334/kg	50.06 MJ/kg × 0.90 (HHV)	7.41	7,413	7,821	26.69
Electric heating	JPY 20/kWh	3.6 MJ/kWh × 0.90	6.17	6,173	6,513	22.22
Heat pump (COP 3)	JPY 20/kWh	3.6 MJ/kWh × 3	1.85	1,852	1,954	6.67

For a real comparison, enter your billed or quoted prices, heating values, and operating conditions. Evaluate equipment and fixed costs separately. The heat pump row is explained in the next section.

Heat Pumps: Use COP, Not Efficiency

A heat pump water heater uses electricity to move heat from outdoor air, so calculate it separately from electric resistance heating. With the coefficient of performance (COP), heating output divided by power input, the same JPY 20/kWh gives about JPY 1.85/MJ at an assumed COP of 3. A COP of 3 is an example for comparing the principle, not a guaranteed value for any model.

Figure 4 shows why the heat output can exceed the electricity input.

A hypothetical heat balance: 1 unit of electricity plus 2 units of outdoor air heat deliver 3 units to the water. Refrigerant flow is shown conceptually.

Heat output exceeds electrical input because heat is taken in from outside. Read rated COP and annual water-heating efficiency as separate figures.

Annual cost also depends on outdoor temperature, inlet water temperature, the target heating temperature, frost buildup on the outdoor unit, and heat loss from the storage tank. Do not project a full year from a COP measured at one set of conditions. Use an annual efficiency rating for the application, or measured data; the Japan Refrigeration and Air Conditioning Industry Association (JRAIA) also explains rated COP and annual performance ratings as separate figures.

The Same Method in US Units

The method works the same with dollars and MMBtu. In this fictional example, a US plant pays $5.00/MMBtu (HHV) for natural gas, burned in a boiler with 85% HHV-basis efficiency, and $0.10/kWh for electricity.

• Natural gas boiler: $5.00 ÷ (1.055056 GJ × 0.85) = about $5.58 per GJ of useful heat
• Electric heating at 0.90: $0.10 ÷ (0.0036 GJ × 0.90) = about $30.86 per GJ
• Heat pump at COP 3: $0.10 ÷ (0.0036 GJ × 3) = about $9.26 per GJ

If your gas price is per therm, multiply it by 10 to get the price per MMBtu first. Check that the boiler efficiency is on the same basis (HHV) as the gas price.

Using the Unit Cost to Calculate Water Heating Costs

Once you know the cost of useful heat, multiply it by the heat required. Take 200 L of water (about 53 US gal) heated from 20°C to 40°C (68°F to 104°F). Assume a mass of about 200 kg and a specific heat of 4.2 kJ/(kg·K); the temperature rise is 20 K, which is the same size as a 20°C difference.

The 16.8 MJ is the heat the water receives. The unit costs calculated above already include equipment efficiency, so do not divide by 0.90 again at this step.

Enthalpy-based heat calculations follow the same rule of keeping input and useful output separate.

Using the same 16.8 MJ with the other assumptions in Figure 3, fuel oil A costs about JPY 36.5 and LPG about JPY 124.5. The heat pump at COP 3 costs about JPY 31.1.

Inlet water temperature changes the result by season, as Figure 5 shows.

Both cases heat 200 L to 40°C (104°F). With 20°C (68°F) inlet water, it takes 16.8 MJ; with 10°C (50°F), 25.2 MJ, or 1.5 times as much heat.

Uses the same specific heat and density approximation in both cases. Bar lengths are in a 1 : 1.5 ratio. Changes in equipment performance with outdoor temperature must be evaluated separately.

With 10°C inlet water, the temperature rise is 30 K and the heat required grows to 25,200 kJ. Under the same electric heating assumptions, one fill costs about JPY 156. When winter costs go up, check separately whether usage rose, inlet temperature fell, or the unit price increased.

Turning Energy Savings into Cost Savings

Start from where the heat goes: use less hot water, lower any excess heating temperature, and reduce standby heat loss. At the same temperature rise, cutting 200 L to 180 L reduces the heat needed for the water by 10%. Keep whatever hygiene or process conditions the application requires.

Efficiency improvements also convert to cost. Delivering the same useful heat, raising efficiency from 0.80 to 0.90 cuts fuel use by about 11.1%.

A 10-point gain in efficiency is not a 10% saving, and the same logic applies to economizer fuel savings.

For piping heat loss, list the exposed surface area, temperature difference, and insulation condition. Estimate the loss from thermal conductivity, heat transfer coefficients, and the overall heat transfer coefficient.

Multiplying the heat saved by the matching unit cost gives an annual fuel cost saving.

Do not count recovered heat as if it were revenue, though. Tie it to the purchased energy it actually displaces. If waste heat is available at different times from when you need heat, exclude the heat recovered when it cannot be used; good records of operating hours and load decide how accurate the savings estimate is.

Finally, compare annual energy charges, basic charges, auxiliary power, and maintenance costs on the same terms. You can also calculate a simple payback period by dividing equipment cost by annual savings. Cost per unit of heat is the foundation of operating cost, but equipment selection also depends on supply temperature, capacity, installation conditions, and replacement cost.

What to Include When You Report a Comparison

When you write up the result in a report or internal document, state what the comparison includes. A bare "Option A is cheaper" leads readers to assume equipment costs and contract terms are already included.

The table below is one way to show that scope.

Category	Included in this article's calculation	Compare separately
Energy cost	Purchase price, heating value, equipment efficiency	Basic charges, contracted power, fuel cost adjustments
Equipment cost	(Not included)	Equipment and installation, removal, maintenance and inspection, auxiliary power
Operating conditions	Rated or assumed efficiency	Part-load operation, start-stop cycles, standby heat loss, seasonal load changes

Checklist: Before You Compare Fuel and Electricity Costs

Run through these points before you trust a cost-per-GJ or cost-per-MMBtu comparison, especially one built from Japanese documents.

• Boundary written down (fuel input, boiler outlet, point of use)
• Price unit confirmed for each option (per L, kg, m³, kWh, MMBtu, or therm)
• Gas volume basis matched between the price and the heating value
• Heating value basis (HHV or LHV) identified for every fuel
• Efficiency on the same basis as the heating value
• Rated efficiency vs. annual or measured efficiency noted
• Heat pump evaluated with COP or an annual rating, not a 0.90-type efficiency
• Losses counted only once
• Marginal energy charge vs. average price chosen to fit the question
• Taxes, fuel cost adjustments, and delivery charges treated the same way for every option
• Price date or quote date recorded
• Results converted to one unit (JPY/MJ, $/GJ, or $/MMBtu) before ranking

Questions to Ask the Japanese Side

If a Japanese supplier, consultant, or sister plant sent the numbers, these questions clear up most ambiguity.

• "Is this boiler efficiency on a higher heating value (高位発熱量基準) or lower heating value (低位発熱量基準) basis?"
• "Which heating value did you use for each fuel, and what is the source and date?"
• "Is the gas volume in normal cubic meters (m³N) or at metered conditions?"
• "Is this efficiency a rated value or an annual or measured value?"
• "Do the prices include consumption tax, fuel cost adjustments, and basic charges?"
• "Where does the calculation boundary end: at the equipment outlet or at the point of use?"

Where This Method Falls Short

Cost per unit of heat compares energy charges only. It does not account for equipment cost, maintenance, supply temperature limits, capacity at peak demand, or how efficiency changes with load and weather.

The heating values used here are illustrative. Real fuel composition, gas quality, and contract terms vary by supplier, region, and date. Treat the results as a framework, then refine them with measured data from your own site.

FAQ

Is the cost per unit of heat the same as the energy unit cost?

Both describe the cost of one unit of energy, but the value differs depending on whether you mean purchased energy or useful heat. Label your table with the end point, such as "per MJ of fuel input" or "per MJ of useful heat to hot water," so readers know what is being compared.

How do I convert JPY/kWh (or $/kWh) to cost per MJ or per GJ?

For the cost of purchased electricity, divide the per-kWh price by 3.6 to get cost per MJ, or divide by 0.0036 to get cost per GJ. For useful heat, also divide by the matching efficiency. For a heat pump, use a COP measured over the same boundary, and do not confuse it with an electric heater's efficiency.

Should I use the lower heating value?

Not automatically. Use the same basis as the efficiency figure: LHV with an LHV-basis efficiency, HHV with an HHV-basis efficiency. Record the fuel heating value, the equipment efficiency, and the calculation boundary together as one set.

Should I include power plant efficiency for electricity?

Not for the cost of heating with purchased electricity. That cost comes from the billed kWh and the electricity price. Primary energy comparisons that trace back to power plant fuel serve a different purpose, so do not mix power plant efficiency or regulatory conversion factors into the billing conversion of 1 kWh = 3.6 MJ.

Is the option with the lowest cost per unit of heat always the best choice?

No. Cost per unit of heat helps compare energy charges, but overall economics also depend on capacity, temperature, utilization, fixed costs, and initial cost. Narrow the list to options that can deliver the heat you need when you need it, then compare annual and replacement costs on the same terms.

Sources

• Fuel oil A and LPG heating values (HHV basis, before and after revision): Ministry of the Environment, Japan, calculation methods for energy and industrial process emissions (draft), Table 1 (Japanese)
• Gross vs. net calorific value in official statistics: RIETI, note on calorific value bases (Japanese)
• Typical gap between gross and net values: IPCC Guidelines for National Greenhouse Gas Inventories, Reference Manual, Chapter 1
• Net-basis efficiency of condensing boilers: Bosch Industrial, boiler-planning.com, efficiency basics
• Natural gas sold on an HHV basis, per-GJ conversion: FortisBC, natural gas price and market information
• Tokyo Gas standard heating value of 45 MJ/m³ (46.04655 before February 2006): Tokyo Gas press release, February 2, 2006 (Japanese); Nakano City statistical yearbook, note on gas supply (Japanese)
• kWh, joule, and Btu conversion factors: NIST, Guide to the SI, Appendix B.9
• Heat pump water heater principle: JRAIA, "What is a heat pump water heater?" (Japanese)
• COP vs. annual heating efficiency: JRAIA, performance ratings for commercial heat pump water heaters (Japanese)